ING Barings conference call summaries (from yahoo thread)
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Top:Business and
Finance:Stocks:Services:Communications Services:GSTRF
(Globalstar Telecommun.)
G* Break-Even Point
by: SafetyAgentMan (M/Aptos, CA)
4283 of 4292
During the conference call Rob Kaimowitz from ING Barings estimated the
break-even point for G* at 14 cents per minute. Bernard Schwartz corrected
him by saying he was heading in the right direction, but the amount was even
lower. IRIDF's break even point is around 1.40 per minute.
Posted: Feb 22 1999 7:41PM EST as a reply to: Msg 1 by YahooFinance
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Top:Business and
Finance:Stocks:Services:Communications Services:GSTRF
(Globalstar Telecommun.)
Re: G* Breakeven and other
Conference Call news
by: Alsoready2Bwealthy (50/M/Orlando, FL)
4289 of 4292
Great conference call link.
I listened to the entire thing and took notes. The main purpose of the call was to
highlight the difference in the business plans of G* and ICO (similar) to IRIDF.
IRIDF is in danger of loan default and the street is worried about all Sat
businesses. Spin control for the current stock linkage and damage. I think they
did hit great home run with the storyline.
Too much to detail completely here but the main points are that G*'s max
capacity is more like 12 Billion minutes/yr and the breakeven is at about 220,000
subscribers (for on-going cash flow expenses). For complete G*1 debt paydown
and financing the construction of G*2 it will take 1 Million subscribers to
breakeven.
IRIDF has 1.5 B/yr, ICO has 5 B/yr.
ICO has similar breakeven cost (~.23/minute)
G* is "High single digit cents" (less than the reported $.14-.21 by ING)
according to BS
IRIDF is at about $1.40/min breakeven. (They may never make it.)
IRIDF came to market first but too quickly. Could not test until the entire system
was on-orbit.
World Phone retail (currently at 1.50 to 2.00/minute) will set the price point. Sat
service can command a premium in some situations.
G* is looking for up to 7.5 million subscribers with G*1. All systems (IRIDF,
ICO and G*) can do will in certain areas of the world but G* has the partners to
do the best in the most places.
Target market is not urban telcoms it is first of all "Regional Roaming",
connectivity in the areas just beyond the reach of urban networks. Second
market is unserved mobile. Third market is unserved fixed sites.
BS allowed to a question that G* will eventually also contain GEO sat service
(but not tomorrow!) to expand the service for fixed sites and help to lower the
price/minute.
Interesting discussion on "Universal Access Mandates". Apparently some
countries are passing laws to place taxes on local telcos (~2% of POTS revenue)
to fund subsidies to help pay for rural phone service in the country. G* looks to
cash in by supplying the phones paid by the government subsidy funds. (and
cutting in the local Telcos on the action.) Sounds win-win to me.
Some discussion that some vendors (Vodaphone) may sell the G* handsets
cheap ($50) + a contract for minutes for selected customers. This subsidy is up
to the retail partners. Retail price will start in the $850-$1100 range and could go
as low as $500 in large production runs.
G* will need to finance $550M to get to full revenue. Expect a note financing
later in the year. LOR has $600-$700M in general corporate cash now and
stands behind the venture.
Posted: Feb 22 1999 10:57PM EST as a reply to: Msg 4283 by SafetyAgentMan
______________________________________________________________
Top:Business and
Finance:Stocks:Services:Communications Services:GSTRF
(Globalstar Telecommun.)
More On ING Barings Conference
Call
by: bbigtim
4287 of 4292
Hi Safety! I just listened to the conference call and found it very reassuring. The
$1.40 per minute break even point for IRIDF is based on the assumption that all
available capacity
(1 1/2 billion minutes per year) is utilized, so the real break even point will be
considerably higher. The analyst pointed out that Omnipoint Worldphone already
offers satellite service at about $1.50 per minute. I know that the IRIDF phones
will be smaller and easier to use, but its hard to see how they are going to be able
to serve anyone but global high-rollers who want one phone that will work
everywhere and will pay a high premium for the privilege. In contrast, under
contracts already in place Globalstar will charge its coooperating companies
approximately $.47 per minute on a wholesale basis, which they can resell for
any price they like (suggested retail is $.65 per minute). This will be quite
reasonable for people who want local roaming in areas without adequate cellular
build-out and fixed service in areas without land-based infrastructure
(Globalstar's target markets). The share price for GSTRF will be adversely
impacted in the short-term by IRIDF's difficulties, but I remain confident that,
unlike IRIDF, GSTRF will be very profitable.
Posted: Feb 22 1999 9:53PM EST as a reply to: Msg 4283 by SafetyAgentMan |
